Chinese banks expand to US

Three major Chinese banks have gained the approval of Federal Reserve to expand to the US. The Fed granted the acquisition of a US retail-banking network by the Industrial & Commercial Bank of China, China’s biggest bank, which is 70% state owned. Bank of China and Agricultural Bank of China were also approved to build branches, in Chicago and New York City respectively. It is a significant milestone for China, which has long been seeking access to the US banking system in order to finance Chinese companies abroad. The Fed’s decision precedes the gradual opening of the US markets to foreign companies and investors. Under the law, the Fed is required to certify that the foreign banks are adequately supervised at home before giving approval. The presence of big US banks like Bank of America Corp., JP Morgan Chase and Wells Fargo & Co. will make it a hard competition for the Chinese banks.